Stimulus funding to bridge $2.1 million general assistance gap

BANGOR, Maine — State health officials have come up with a plan that addresses an estimated $2.1 million reduction in state general assistance subsidy for the next fiscal year.

Brenda Harvey, commissioner of the state Department of Health and Human Services, said Wednesday that the gap will be made up through additional stimulus funding that the state was able to tap into.

Additionally, Harvey said, those federal funds will allow the state to hire temporary staff to process the significant backlog of applications for Supplemental Security Income, or disability benefits. In turn, she said, that will reduce the demand for general assistance, which is meant to be temporary or emergency aid.

“This [funding] allowed us to present an alternative to the [Legislature’s] Health and Human Services Committee that repeals language in the state’s supplemental budget that would have affected general assistance,” the commissioner said. “The committee was unanimously supportive.”

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Although the alternative still needs approval by the Appropriations Committee and the full Legislature, officials in cities that would have been affected the most by the reduction — Bangor and Portland, in particular — are breathing a sigh of relief.

“It’s great news for the city, especially given the need,” said Shawn Yardley, Bangor’s director of health and community services. “I’m glad this is going to be resolved.”

Part of Gov. John Baldacci’s supplemental budget that addressed a $438 million revenue shortfall was a change in the funding formula for general assistance. Historically, the formula has been simple: Cities or towns pay 50 percent; the state pays 50 percent. Municipalities that have a higher demand, however, such as Bangor, can receive up to 90 percent funding from the state once demand reaches a certain threshold, something that happens every year in Bangor.

The change would have eliminated the threshold for 90 percent funding, which opponents said would have adversely affected communities that see the biggest need.

“We’ve been working with DHHS to find alternatives to make sure that wasn’t necessary,” said David Farmer, a spokesman for the governor. “Our goal was always to mitigate that cut.”

Farmer also said it’s important to look at the whole picture. For instance, even through the supplemental budget sought to change the funding formula, the budget also added $800,000 in general assistance funding for the remainder of the 2010 fiscal year to help municipalities deal with a growing need.

Bangor would have seen approximately $550,000 less in state general assistance funding for 2011, that likely would have been made up on the local end by taxpayers. Because the city cannot refuse general assistance requests if applicants meet the criteria, Yardley said the change would have resulted in an unfunded mandate at the worst possible time.

In Portland, Maine’s largest city, more than $1.3 million in general assistance allocation would have been lost to a program that accounts for roughly 40 percent of all general assistance distributed statewide.

Although many other cuts were proposed as part of the governor’s plan to address a $438 million revenue shortfall, general assistance generated a particularly strong reaction from legislators last month.

Harvey said it appeared likely on Wednesday that the Legislature would support the alternative. Asked whether the fix could be seen as temporary given that stimulus money is being used to bridge the gap, she said the economy ultimately would decide that.

“One of the things we’re seeing is a sharp increase in [general assistance] requests, which was expected in a down economy,” the commissioner said. “As things improve, we expect the demand for aid to come back down and, historically, that has been the case.”